Correlation Between Urban Edge and NexPoint Diversified
Can any of the company-specific risk be diversified away by investing in both Urban Edge and NexPoint Diversified at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Urban Edge and NexPoint Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Edge Properties and NexPoint Diversified Real, you can compare the effects of market volatilities on Urban Edge and NexPoint Diversified and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Urban Edge with a short position of NexPoint Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Edge and NexPoint Diversified.
Diversification Opportunities for Urban Edge and NexPoint Diversified
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Urban and NexPoint is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Urban Edge Properties and NexPoint Diversified Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexPoint Diversified Real and Urban Edge is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Urban Edge Properties are associated (or correlated) with NexPoint Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexPoint Diversified Real has no effect on the direction of Urban Edge i.e., Urban Edge and NexPoint Diversified go up and down completely randomly.
Pair Corralation between Urban Edge and NexPoint Diversified
Allowing for the 90-day total investment horizon Urban Edge Properties is expected to generate 1.47 times more return on investment than NexPoint Diversified. However, Urban Edge is 1.47 times more volatile than NexPoint Diversified Real. It trades about 0.17 of its potential returns per unit of risk. NexPoint Diversified Real is currently generating about 0.23 per unit of risk. If you would invest 2,193 in Urban Edge Properties on August 23, 2024 and sell it today you would earn a total of 102.00 from holding Urban Edge Properties or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Edge Properties vs. NexPoint Diversified Real
Performance |
| Timeline |
| Urban Edge Properties |
| NexPoint Diversified Real |
Urban Edge and NexPoint Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Edge and NexPoint Diversified
The main advantage of trading using opposite Urban Edge and NexPoint Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Edge position performs unexpectedly, NexPoint Diversified can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NexPoint Diversified will offset losses from the drop in NexPoint Diversified's long position.| Urban Edge vs. Site Centers Corp | Urban Edge vs. Kite Realty Group | Urban Edge vs. Retail Opportunity Investments | Urban Edge vs. Inventrust Properties Corp |
| NexPoint Diversified vs. NexPoint Strategic Opportunities | NexPoint Diversified vs. Prospect Capital | NexPoint Diversified vs. Ready Capital | NexPoint Diversified vs. SiriusPoint |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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